KARNAPHULI RAYON AND CHEMICAL LTD. Vs. COLLECTOR OF CENTRAL EXCISE AND LAND CUSTOMS

JUDGEMENT

(1.) In this case, leave to appeal was granted to consider whether 'Dilphane' manufactured by the appellant company from bamboo pulp is included in item No. 35 of the First Schedule to the Central Excise and Salt Act, 1944 and is chargeable to excise duty under the said item.

(2.) Appellant's case is that Karnaphuli Rayon and Chemicals Limited is a newly established company. They have invented a packing material from bamboo pulp which they have named as 'Dilphane' the first three letters being the abbreviation of the name of the parent organisation of the company, namely, Dawood Industries Limited. The appellant received a notice from an Inspector of Central Excise, Chandroghona Circle, Chittagong intimating that the Collector of Central Excise and Land Customs, Chittagong, East Zone had issued an order to assess 'Dilphane' under item 35 of the First Schedule to the Central Excise and Salt Act, 1944 (hereinafter referred to as the Act) and they were further directed not to remove Dilphane without excise formalities and payment of duties since the commencement of its production. They, thereafter, filed an application under Article 98(2) of the Constitution impugning the validity of the said notices and the directions contained therein as regards demand for Excise Duty.

(3.) Rule Nisi issued in the above mentioned application was discharged by the Dacca High Court. It was held that the appellant failed to make out a case for exemption from excise. duty of its product known as 'Dilphane' and that as a matter of fact 'Dilphane' was covered by the word 'Cellophane' mentioned in item 35 of the Act.